Breaking News

NUBC tasks CBN to tighten searchlight on banks

By Chinedu Ibeabuchi

THE Nigerian-Ukranian Business Council (NUBC) has called on the Central Bank of Nigeria (CBN) to pressingly tighten its beam-light on Nigerian banks with a view to checking the unethical practices of the banks declaring false performance, false profits and dividends annually.

NUBC said this will aid in ensuring that operators imbibe the spirit of transparency and accountability and restore public confidence on them.

In a speech delivered by Mr. Mac Ekechukwu, Chairman 2009 Nigerian Economy Review Committee , Tuesday, in Lagos said that the NUBC though  appreciated the recent sanitisation carried out by the Central Bank, it however frowned at the low level of professionalism employed by the apex body in handling the issue as its sent some adverse signals to the minds of stakeholders in the industry.

According to him, “ We appreciate the recent bank audit carried out by the Central Bank of Nigeria (CBN) on banks to mitigate the negative effect of the global financial crises in the sector and further consolidate on the achievements made so far in streamlining the number of banks to 25.

However, we have observed that the process of the first phase of the audit on 5 banks and the bailout fund that followed was not professionally handled by the CBN as would have been expected as it sent very wrong and negative signals to both local and foreign investors on the eminent collapse of the sector rather than salvaging the situation. We believe this was what informed CBN to re-strategize in releasing the second phase of the audit of additional 3 banks.

“We wish to suggest that the CBN should speed-up the remaining process of the audit and in more professional manner that would not jeopardize the sanity and confidence already repose in the sector.”

The council further envisaged that “the CBN should urgently make necessary arrangement to pay-off all depositors of the failed banks in the country, as a result of the re-capitalisation exercise while it should by way of appropriate policy measures, also ensure the full participation of the 25 mega banks in the micro-finance policy for a positive impact in the real sector of the economy.

The council decried the high interest rate charged by banks beyond what CBN has pegged for lending which, according to it, is constituting serious impediment to businesses growth in the country.

“It is disheartening to note that in spite of the recent CBN pegging of an interest rate cap on lending at 22 per cent per annum and deposit rate of 15 per cent, respectively from April 1st, 2009, until end of 2009 as temporary measure to reduce liquidity pressure, the average lending rate during the year still hover within 24 to 32 per cent, thus, constituting serious impediments with interest rate chargeable by banks.

“This trend of rising interest rate structure should be addressed without further delay by fashioning out a pragmatic and concessionaire interest rate for real sector operators if our local industries, especially SMEs are to grow and thrive,” he declared.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.